Simple/Stiupid question:
When I download the files, I'm downloading them to my computer correct? not directly on the phone.
Correct.
In Step 2, I had to go to the "Source" link to download the file *OFFICIAL* SPH-D700-DK28-8Gb-REL.tar.md5 - xda-developers. Am I downloading Dk28 Update of DK18 Update? It seemed obvious that it would be DK18, but I thought I'd ask since I had the experts' attention.
Don't go to the "Source" link, that is for reference/crediting the original source only. Download the file from the "Link" link, which is "SPH-D700-DI18-8Gb-REL.tar.md5".